A settlement agreement can be a valuable document for employers in a difficult workplace situation to obtain a waiver of potential claims and a “clean break”. A settlement agreement has many upsides both for employers and for employees where there is mutual agreement over references and announcements, for example. This allows employers to have more control over an exit and to be able to manage a tense situation in a smoother way. The importance of confidentiality obligations cannot be understated to avoid negative publicity and staff morale being hit.
Vardags is highly experienced in drawing up settlement agreements. The agreement may be needed to settle a potential claim by an employee or to allow for the withdrawal of a grievance or claim already made. Either way, we can provide expert advice help our clients to resolve workplace problems.
We will ensure that all formal requirements are met to protect your company’s interests.
When an employee informs you that they wish to leave your company or make a grievance or bring a claim it may be better to negotiate a managed exit. Alternatively, a company may decide that the best way forward is to have a without prejudice conversation about an exit as things are just not working out, for whatever reason.There will often be a number of discussions leading to the agreement of an exit package for an employee. Our highly experienced team are able to assist you in making these conversations as productive as possible whilst protecting your business interests. We can help you with scripts and e-mails to ensure your paper trail is well ordered and protects your company’s position.
One of the more complicated aspects of settlement agreements often centre around which payments are taxable and which payments can be made tax free. The £30,000 tax free concession applies to payments made by way of compensation. Contractual payments such as payment in lieu of notice should not be paid tax free and the treatment of notice should be clear from the settlement document to avoid issues further down the line.
Vardags has decades of experience working on high value employment disputes, obtaining the very best results both in and out of the courts and tribunal for individuals and companies.
Our service is Director-led and specifically tailored to your circumstances and needs.
We specialise in handling complex and high-value employment issues and claims on behalf of, or involving, directors, shareholders, executives, senior management and employees. Many of our cases involve both High Court litigation and employment tribunals, for example, where there are issues of shareholder prejudice. We also have considerable experience in acting for clients involved in serious cases of sexual or other harassment; discrimination cases; and those involving whistle-blowing.
We support and guide employers, from SMEs to public companies, through business reorganisations, including transfer of undertakings, redundancies and mergers. Our aim is to keep our clients out of the courts, but where this is not possible, we provide representation at the High Court and employment tribunals.
Frank Ryan, Director and Supervisor
Caroline Graham, Consultant
The team is also assisted by trainee solicitors, who normally spend three to six months in the employment department as part of their general training.
Where your employment matter becomes contentious, the scope of our work normally includes:
Frank Ryan has successfully mediated many claims, resolving them through negotiation and agreement and. However, it is still possible that a matter may require at a final hearing. Normally, costs are not awarded to either party in employment tribunal proceedings, and therefore it is necessary for a careful assessment of the net returns a claimant may recover.
Subject to our standard terms and conditions of business, our legal fees are calculated by reference, among other things, to the total amount of time spent on a case. Charges are made for telephone calls, outgoing letters and emails, consideration of documentation addressing tactics and case planning, meetings and general preparation and pursuit of a claim.
Partners - £450 per hour.
Consultant - £450 per hour.
Assistant Solicitor - £275 per hour.
Trainee solicitors - £205-245 per hour.
The above legal fee charges will be subject to VAT at the current rate of 20% (where applicable) and also subject to modification on 1st April annually.
We will be able to provide an estimate of overall costs once we have received sufficient information. The amount of work involved in each case will depend on the facts and issues, as well as the level of support required by the client and the agreed strategy.
Where there are related civil proceedings, we would need to provide a separate quotation for this work since it would not be covered as part of the pricing estimate for our fees discussed above. An example where this could arise is if there is a petition alleging shareholder prejudice. The quotation would be given at the time so you are aware of all the relevant costs for the related matters. Illustrative Range of Fees
As a general guide, the overall costs of bringing or defending claims for wrongful or unfair dismissal (excluding the fees for barristers and any expert witnesses) are:
• A standard case of medium complexity £50,000 to £100,000 plus VAT.
• A complex case £100,000 to £150,000 plus VAT.
The overall costs of a case may be higher or lower than the above figures depending on a variety of factors, such as:
Cases can be further complicated in situations where:
Disbursements are costs related to your matter that are payable to third parties. We handle the payment of the disbursements on your behalf to ensure a smoother process.
Employment tribunals do not currently have fees, although there are court fees if action has to be brought in the civil courts as well.
Barristers’ fees depend on the level of experience (or “call”) of the barrister appointed. We will seek to agree fees with you and the barrister’s clerk before they are incurred. However, please note that third party expenses (barristers’ fees and experts’ fees for independent medical evidence or material related to employment prospects or to engage in private or judicial mediation) must be covered by the client in advance of liability for the fees being incurred.
A junior barrister of between two and ten years’ call appearing at a preliminary hearing of up to two hours could charge fees in the range of £750 to £2,000 plus VAT.
A final hearing may take between three and ten days depending on the complexity of the issues and number of witnesses called. A senior barrister of 15 years’ call (a “senior junior”) at a three day final hearing could charge a brief fee for trial preparation and day one of the trial of £7,500 - £10,000, with additional refresher fees for days two and three of the trial of £2,500 to £3,000, again plus VAT. A senior barrister of 15 years’ call at a ten day final hearing could charge a brief fee for trial preparation and day one of the trial of £25,000 to £30,000, with additional refresher fees of £2,500 to £3,000 for subsequent days, again plus VAT.
Engaging a more junior counsel for a three day final hearing might charge a brief fee of £3,500 to £6,000 with additional refresher fees of £1,000 to £2,000 for subsequent days, again plus VAT. More junior counsel engaged for a ten day final hearing might charge a brief fee of £10,000 to £20,000, with additional refresher fees of £1,000 to £2,000 plus VAT for subsequent days.
If the instruction of an expert is required to provide evidence in any particular field(s), a fee would be payable for their time. Experts’ fees largely depend on the nature of their instruction and the facts of the case, it is therefore difficult to estimate these at the outset.
If it appears that mediation or adjudication may assist in resolving your matter, and both parties agree, a fee would be payable for the mediator’s / adjudicator’s time. These fees are normally split between both parties and are usually in the region of £1,000 - £1,500 plus VAT for half a day, and £2,000 - £3,500 plus VAT for a full day, however, they can be higher. You must also bear in mind that it is sometimes possible that a barrister may need to attend a mediation /adjudication in particularly complex cases or where your opponents are insisting on Counsel attending (although we frequently attend mediations without Counsel). Their fees could range from £1,000 up to £7,500 plus VAT, depending on their level of call.
VAT if applicable would be charged at the current rate of 20%.
In appropriate cases, and only when acting for a claimant, we may be prepared to consider acting on a Damages Based Agreement, details of which can be supplied by us in cases that we consider appropriate.
The length of time required to complete an employment claim depends on whether the matter is resolved by agreement or if it proceeds to a hearing. Negotiations for settlement can take place at any time and we advocate the use of private mediation in appropriate cases.
The time limit for bringing claims is normally three months from the date of the dismissal or other act that forms the basis of a claim, plus four to six weeks to allow for early conciliation. Early conciliation must be started within three months and involve any relevant potential respondent(s).
If a case is not settled through early conciliation or negotiation, the employment tribunal process is likely to take between 6 to 12 months to complete. This is only an estimate and we will of course be able to provide a more accurate timescale once the matter progresses and we have more information.
The timeframe in which your matter is concluded will also depend on the timeliness of responses from the employment tribunal, which can be affected by their capacity at any given time.
If proceedings are not necessary, many employment disputes can be resolved quickly, sometimes in a matter of a few weeks or a couple of months.
We offer a free consultation to qualifying individuals. Please call our confidential enquiry line on 020 7404 9390. Lines are staffed 24 hours.
When you contact us a member of our client relations team will take the full details of your situation, assess whether we can assist you, and if so, determine the best team for your case.
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